Buying a dream house is getting really tough. Builders are known to default and leave projects incomplete. The high cost of projects might force the builder to abandon them midway. This is a nightmare to home buyers as builders abscond; not bothering about buyer’s pleas. SBI, the largest lender in the country, has come up with a solution to the problem. SBI will refund home loan borrowers if the builder delays the project.
SBI has launched the Residential Builder Finance with Buyer Guarantee Scheme or RBBG Scheme, to guarantee the completion of select residential projects to home loan customers. Home Buyers can buy their dream home with confidence, which would increase sales of residential units in India.
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The Residential Builder Finance with Buyer Guarantee Scheme or RBBG Scheme could be the answer to the problems home buyers face in India. SBI will refund the whole principal amount within the requisite deadline. The RBBG Scheme is valid only till the builder gets the Occupancy Certificate.
You get the benefits of the Residential Builder Finance with Buyer Guarantee Scheme for projects with a maximum home price up to Rs 2.5 Crores. All developers who complete the due diligence with SBI can avail loans between Rs 50-400 Crores under the RBBG Scheme.
See Also: Pros and Cons of Joint Home Loan
The Residential Builder Finance with Buyer Guarantee Scheme can be a game-changer in the Real Estate Space, especially for homebuyers who are stuck with incomplete and undelivered projects. RERA and GST also ensure that you get the dream home in time. The RBBG Scheme covers all RERA registered projects, which after the RERA deadline, are considered stuck.
Till the time the Builder gets the occupancy certificate (OC), there is an SBI guarantee on the home loan you take. This is a win-win situation for all the parties involved namely banks, builders and home buyers.
SBI believes that the RBBG Scheme can be a game-changer in the real estate space and would increase the number of residential units purchased. SBI would take risks only with developers who are known to complete projects on time. There’s thorough due diligence and only projects which pass a pre-approved test would be accepted.
Well for starters, SBI has slashed the external benchmark rate by 25 bps to 7.8%. This would bring great cheer to several home loan borrowers who get loans at 7.9% instead of 8.15%. SBI is also the largest lender in the country and has 22% market share of home loans in India.
Let’s say you (a buyer) have booked an apartment in a project for Rs 1 Crore. You have already paid Rs 50 Lakhs. What if this project gets stuck midway? Well, SBI will refund the Rs 50 Lakhs you have paid. The guarantee term lasts until the builder gets the Occupancy Certificate or the OC.
So, if you have booked an apartment with a project for Rs 2 Crores and have already made the payment of Rs 1 Crore if the project is incomplete due to any reason, SBI refunds the Rs 1 Crore you have paid the builder. This happens only until the builder gets the Occupancy Certificate. SBI has tied-up with Sunteck Reality for three projects which are ongoing with MMR (Mumbai Metropolitan Region). The SBI RBBG Scheme would be launched in 10 cities and includes affordable housing projects which are priced up to Rs 2.5 Crores.
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